Facebook Inc.’s (NASDAQ: FB) market cap rose $40 billion to $340 billion during the first quarter as investor sentiment moved sharply in the direction of the world’s largest social network.
Among the three most powerful reasons the stock has gone so much higher are earnings, its aggressive move into the virtual reality business and the space it has put between itself and other social media companies in revenue and user count.
Several research firms have pointed out the virtual reality product sales will rise into the billions of dollars in the next five years, and that Facebook will have a dominant position in the industry. According to Barron’s, Cantor Fitzgerald’s Youssef Squali wrote in a note to investors:
Assuming Facebook’s Oculus unit can sell 11 million headsets by 2020, and a whole bunch of software and software royalties by then, it could mean $7 billion in new revenue for the company.
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